Skip to main content

Lapavitsas: 15-20% devaluation for the new drachma!

globinfo freexchange

SYRIZA MP, Costas Lapavitsas, during a recent interview in The Press Project website, analyzed among other things, the way through which Greece could design a possible exit from the euro currency, in order to be released from the ECB hegemony and build a growth plan. Grexit would also allow SYRIZA to implement its program as promised.

As he said, it has been proved that the internal devaluation was a tragic mistake in Greece's case. The unit labor cost has been crushed, but we haven't seen a boost in the exports until very recently, due to the fall of euro. Euro has fallen against dollar so we had a boost in the exports. Therefore, the perception that exports could save country is wrong. In the case of Greece, the percentage of exports to GDP is already small.

A possible external devaluation would not function through the exports. The Greek economy would not be saved through a boost in exports. It would be a matter of the internal market to cover the local demand. This would be the key role of the external devaluation and we could have seen much better results in this field.

Greece does not need a big external devaluation right now, exactly because the labor cost has been crushed. All these measures that did not save the country, destroyed labor cost. Therefore, a possible devaluation right now would not have to be very big. A devaluation of 15-20% would be quite enough.

Generally speaking, current account balance is zero because of the recession, therefore the pressure by the devaluation would not be very strong. Of course, in such a case we should have control of the capital flows. This would be a policy to limit the fall of the new parity. Initially, it is possible to have a fall of parity higher than 15-20%. During the first weeks we would see a rapid fall because of the speculative attacks, but it will not last too long. Parity for the new Greek currency would be stabilized at 15-20% below the 1 to 1 related to euro. This would probably take a few months.

Initially, at the time of the bigger devaluation, the government should take certain measures to protect the economy and the country. The government should secure financial sources to back the new currency. There are some ways through which the government could do this.

As Lapavitsas concluded, the reason for which we should examine the possibility of returning to a national currency, is the full implementation of SYRIZA's program. The key factor for the difficult position of Greece is the European Central Bank which uses the liquidity, meaning that Greece is not a sovereign state in the areas of currency and liquidity. The country is fully dependent on the ECB.*

The whole interview (in English, the second video below):

It was quite an interesting interview. However, Mr. Lapavitsas didn't mention a key issue, which is the control of the central bank. In case of returning to national currency, shouldn't Greece nationalize the central bank (or establish a new one), so that the state to have complete control of the monetary policy? Wouldn't this be essential for the country to be protected by speculation, or, a new round of financial war?

Many officials of the past and present Greek governments avoid to answer clearly. It seems that the answer to this question is still a taboo, for some reason.

The IMF worried that a devaluation of the ruble would set off a round of inflation. Its insistence on Russia maintaining an overvalued currency and its supporting that with billions of dollars of loans ultimately crushed the economy. (When the ruble was finally devalued in 1998, inflation did not soar as the IMF had feared, and the economy experienced its first significant growth.) [...] For the oligarchs trying to get their money out of the country, too, the overvalued exchange rate was a boon-it meant that they could get more dollars for their rubles, as they squirreled away their profits in foreign bank accounts.”


  1. Anonymous20/5/15 15:42

    It seem he doesn’t listen…It’s a pity. That man may be most likely after all an egomanic narcissist who cares only about himself. I suggest…to for a serious “boycottage” from his viewers so he will be left alone to realize his faults or at least that we are NOT sheep and do some practical stuff happen as an exchange. But if he does the same ridiculous charlatanism, we must do the same trick again. He is not to be trusted anymore.

    Or he is an incredible genius and we miscalculated in some shape or form in the most complex way possible.

    Anyway I will ring the bell to all his blog viewers to take a stand and stop giving him traffic, so he will learn his lesson. We don’t chew cheap pseudo-intellectualism of the buttocks which is all words and words and ZERO serious practical actions.

    Spread this with good smart will at every well-known visitor of Varoufakis’ blog, so he will learn to behave and think.


    1. The article is about Lapavitsas' positions in case you didn't notice. Anyway, Varoufakis and Lapavitsas are two of the best economists participating in a Greek government ever. What you say is the usual narrative by the mainstream media and the oligarchs behind them, who see such brilliant economists participating in a Leftist government as a threat for their sovereignty over the majority.

    2. Anonymous26/7/15 01:42

      I don't know under what basis you claim that Varoufakis and Lapavitsas are the best economists....

      Besides, I reckon that you are ignoring the fact that both Varoufakis and Lapavitsas are Professors.

      In real life Professors are no use, since theory and reality never meet. Things only get worse when you have them in charge; trust me I've seen this happening numerous times.

      If you don;t understand what I am saying perhaps you need to look around you and judge for yourself. It only took few months and the economy is crippled.

      If you still don't understand perhaps you have never worked in your life or you are just a fanatic.


Post a Comment

Popular posts from this blog

MSNBC poll on Julian Assange backfires epically

globinfo freexchange
Frequently - if not always - polls set-up by corporate media aim to track public opinion on a specific issue. The results could be used by the deep state apparatus in order to justify an action, or, figure out how to handle a negative trend for the deep state agenda.
Of course, the question could be set-up in a very simplified and convenient manner, so that the results could be translated accordingly.
Yet, the results from the following MSNBC poll on Julian Assange are so devastating for the deep state planning that leave little room for any misconception and manipulation.
Specifically, you have two options to answer the following question: “Should Julian Assange be prosecuted for his involvement in WikiLeaks?
The first option is to answer that "Yes, he is a criminal."
The second option is to answer that "No, he is a whistleblower and deserves protection."
At the time we checked out the results, the second answer prevailed overwhelmingly with 95% (~1…

Trump's failure to start a civil war in Venezuela could be proved disastrous for the plans of the US imperialists

by system failure
Donald Trump and his bloodthirsty warhawks are about to break the record of failed attempted coups against a single country. Concerning Latin America, the US imperialists were setting the desirable conditions for their corporate beasts usually by overthrowing governments and supporting military dictatorships.
But Trump himself has already broken another record. The record of not keeping his promises to the American people - every one of them. The 'anti-interventionist', 'anti-establishment' Trump, has already started a war against Venezuela, which so far includes brutal economic sanctions, sabotage operations, attempted coups. Trump not only does whatever he can in order to satisfy the US neocon/neoliberal establishment and the deep state, but especially in the case of Venezuela, he follows the obsolete CIA playbook to the letter.
So, after a series of failed orchestrated coups, Trump's warhawks attempted to start a civil war in Venezuela by mobiliz…

Former top US official confirms: military action against Venezuela will become a Vietnam 2.0 for the US imperialists

globinfo freexchange
Former US Chief of Staff for Secretary of State, Lawrence Wilkerson, spoke with Sharmini Peries of the Real News about Trump's plans for a potential US military action against Venezuela.

As he pointed out:
Elliott Abrams, Mike Pompeo, John Bolton, and the administration’s approach to Venezuela, is as if they were Panama or they were Honduras. They are not. They’re very professional. That puts them above Argentina, above Chile, whose militaries are quite competent, too. 
Mr. Trump ought to be very, very careful about saying he’s going to send marines or soldiers to Venezuela because the Venezuelan military will be unified immediately. It will take to the hills and it will fight as the Vietnamese did during the Vietnam War, and as the Taliban are in Afghanistan right now: to the last marine, to the last soldier.
Putin is a smart man, probably told Trump 'you don’t want to get involved in those jungles. You don’t want to get involved in those mountains. You …

Latest ridiculous attempts by the US propaganda machine on Gaza, Venezuela – enjoy

globinfo freexchange
Plenty of propaganda is manufactured by the US deep state apparatus to push for the imperialist agenda. Yet, some elements of the propaganda machine are still unable to realize that independent truth seekers and real journalists are watching, and therefore, these elements could be easily exposed.
Sloppy efforts immediately backfire in social media and the Internet. Most recent sloppy efforts are related to Gaza and Venezuela.
As the Newsweekreported:
Senior 2020 Trump campaign adviser Katrina Pierson used a 2015 video showing a Ukrainian rocket launch alongside comments about this weekend's deadly attacks between Israel and Gaza militants and a condemnation of congresswoman Ilhan Omar.
Pierson, who was Donald Trump's 2016 campaign spokesperson and is a frequent cable news guest, shared the video—which was first posted online in 2015 and reportedly shows Ukraine launching dozens of rockets at Russian-backed separatists—on Sunday.

Fox clowns committed suicide by bringing Bernie Sanders inside their nest to destroy them

... and the liberal centrists must be really pissed off
globinfo freexchange
It was epic indeed. The moment where the crowd inside the Fox ultra-right nest enthusiastically cheers in favor of a government-run healthcare system, could actually be considered a historical moment, thanks to Bernie Sanders.
The moment clearly depicts and officially marks the end of controlled audiences in controlled MSM environments. It shows that the well-paid MSM pundits and their producers are finding increasingly difficult to set up the scene according to the desirable agenda. Therefore, audience reactions can't be directed, or predicted in many cases by the MSM 'experts'.
The shock for the MSM tools was inevitable. It shows that they are now completely detached from the ordinary people and their problems.
But the whole thing highlighted something even more fundamental. It was another loud evidence for the fact that the BS neoliberal narratives don't work anymore.
And even more remarkably, th…

CNN sets up a fully controlled audience panel to promote pro-establishment candidates using Bernie Sanders progressive agenda

 An example of advanced psy-ops by the corporate media 

globinfo freexchange

As we wrote recently, the moment where the crowd inside the Fox ultra-right nest enthusiastically cheers in favor of a government-run healthcare system, could actually be considered a historical moment, thanks to Bernie Sanders.

The moment clearly depicts and officially marks the end of controlled audiences in controlled MSM environments. It shows that the well-paid MSM pundits and their producers are finding increasingly difficult to set up the scene according to the desirable agenda. Therefore, audience reactions can't be directed, or predicted in many cases by the MSM 'experts'.
Now, here is an example showing a successful set up through a controlled audience. It took place inside CNN and there is plenty of evidence that was indeed carefully set up. In the following video, Mike Figueredo of the Humanist Report felt optimistic, but also quite frustrated at the same time. Figueredo's reaction …

Chelsea Manning proves that she is a real hero

globinfo freexchange
Outside of an Alexandria, Virginia courtroom, Chelsea Manning explained to reporters why she would refuse to testify before a second grand jury investigating Wikileaks' Julian Assange, and as a result, face jail time once again. On May 9, Manning was released from jail because the term of the last grand jury she refused to testify before expired. She was immediately subpoenaed once again—for May 16.
Her following words clearly depict that Chelsea Manning is a person with strong and solid principles and a real hero:
I will not cooperate with this or any other grand jury, so it doesn’t matter what it is, or what the case is. I’m just not going to comply or cooperate. Facing jail again, potentially today, doesn’t change my stance. The prosecutors are deliberately placing me in an impossible position: go to jail and face the prospect of being held in contempt again, or, in the alternative, foregoing my principles, the strong positions that I have, that I hold dear…

Chemical weapons assessment contradicting official Syria narrative is authentic

The Organization for the Prohibition of Chemical Weapons (OPCW) has begun responding to queries by the press about a leaked document which contradicts official OPCW findings on an alleged chemical weapons attack last year in Douma, Syria. The prepared statement they’ve been using in response to these queries confirms the authenticity of the document.
To recap, a few days ago the Working Group on Syria, Propaganda and Media (WGSPM) published a document signed by a man named Ian Henderson, whose name is seen listed in expert leadership positions on OPCW documents from as far back as 1998 and as recently as 2018. It’s unknown who leaked the document and what other media organizations they may have tried to send it to.
The report picks apart the extremely shaky physics and narratives of the official OPCW analysis on the gas cylinders allegedly dropped from Syrian government aircraft in the Douma attack, and concludes that “The dimensions, characteristics and appearance of the cylinders, a…

Updates for a possible coup against Jeremy Corbyn

 globinfo freexchange

In this episode of RT's Going Underground, former MP and author of A Very British Coup and The Friends of Harry Perkins, Chris Mullin, spoke about the history of MI5 and MI6 meddling in UK politics against Labour Party leaders. He also estimated whether a British coup is underway against Jeremy Corbyn.
The story of A Very British Coup was set in the 1980s when there was speculation about the possibility of a government led by someone like Tony Benn and the establishment conspired to bring it down. The establishment in this case being a sort of mixture of the security and intelligence services, the media barons, with a little help from the Americans. 
Tony Benn looked likely to become deputy leader of the Labour Party which at the time was strongly challenging the government of Margaret Thatcher in the opinion polls. Persistent rumours circulated over the years about attempts by members of the British security services, and other wings of the British Establish…

How GMO seeds and Monsanto/Bayer’s “RoundUp” are driving US policy in Venezuela

With Juan Guaidó’s parallel government attempting to take power with the backing of the U.S., it is telling that the top political donors of those in the U.S. most fervently pushing regime change in Venezuela have close ties to Monsanto and major financial stakes in Bayer.
by Whitney Webb
Part 4 - Why is a top to Marco Rubio increasing his stake in Bayer while others flee?
Yet, it is AEI’s top individual donor noted in the accidental “schedule of contributors” disclosure who is most telling about the private biotech interests guiding the Trump administration’s Venezuela policy. Paul Singer, the controversial billionaire hedge fund manager, has long been a major donor to neoconservative and Zionist causes — helping fund the Foreign Policy Initiative (FPI), the successor to the Project for a New American Century (PNAC); and the neoconservative and islamophobic Foundation for the Defense of Democracies (FDD), in addition to the AEI.
Singer is notably one of the top political donors to Senat…